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BusinessIndia

Cheaper Venezuelan crude may return to India from Feb 

Team Happen Recently
Last updated: 2024/01/23 at 10:24 AM
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 In contrast, Venezuelan crude can be bought with effective discounts of around $8-10 per barrel after the US eased sanctions against the country mid-October, people aware of the matter said.  

 Cheaper Venezuelan crude oil may start flowing to India from next month after three years as domestic refiners are moving away from Russia to more economical energy imports after sanction-hit Moscow drastically reduced discounts to around $2 a barrel, three people aware of the development said.  

 In contrast, Venezuelan crude can be bought with effective discounts of around $8-10 per barrel after the US eased sanctions against the country mid-October, they said, requesting anonymity. Discounts are generally with reference to the benchmark Brent crude, which fell about 1% to $78.56 a barrel on Friday. The downward trend continued on Monday as Brent fell by 0.22% at $78.39 in morning trade. 

 To meet India’s  growing energy needs, New Delhi  is  not only  diversifying  its crude oil imports but  is  also  making  efforts to  continue importing  from old suppliers such as Venezuela,  a company  manager said. .  India, the  world’s third-largest  crude oil consumer, imports more than 87% of its  needs. He added that they are ready  to  establish  supply  links  with any  manufacturer  at economical  prices.  

  “Refineries  have  only  purely commercial considerations  when  importing  crude oil. Long  before  US sanctions  hit India in 2020, Venezuela was  one of  the  main  crude oil suppliers. It  became India’s third-largest  crude oil  supplier  in  2012,  with new refineries as  the main supplier, set  to process cheap but low-quality waxy Venezuelan  crude, ”  said the second person, a government official. Reliance  Industries’  Jamnagar  and Essar (now Nayara)  plants  were the two main buyers of Venezuelan crude at  the time,  and  several state-run refineries  later  signed  long-term crude supply contracts with  Venezuela.  PDVSA,Venezuela’s  state oil company. 

  According  to data  presented to  Lok Sabha on July 31,  2017, India’s  imports  from Venezuela increased  to  USD 11,729.89  billion in  2014-15, mainly due to crude oil purchases. sharp decline.  global crude oil prices.  

The average  price of the  country’s crude oil imports (Indian oil  basket), which was $86.14  per  barrel in 2014-15,  fell by over 46%  to $46.17 in  2015-16.  

 Due to the US sanctions, imports from Venezuela (over 90% of crude supplies) saw a sharp fall from $6.05 billion 2019-20 to $714 million in 2020-21. It plunged further to $334 million and $178 million in 2021-22 and 2022-23, respectively. Other than crude oil, India imported dye intermediates, iron, copper and lead from the Latin American country. 

  Both public and private sector refiners have started negotiating long-term, large volume contracts with PDVSA. Some have also contracted immediate supplies and they are on the way, the third person said.  

 “With Venezuelan crude available in the market and some Indian refiners expressing interest in purchasing discounted Venezuelan crude to diversify their imports and capitalize on refining margins at the expense of some sour Middle Eastern grades, India’s crude import strategy is at a crucial and intriguing phase,” said Sumit Ritolia, refinery economics analyst at S&P Global Commodity Insights, an information provider. 

Due to heavy discounts, refiners will prefer Venezuelan crude compared to Russian crude, which once rose to one-third of the Indian basket from about 0.2% in 2022-23, the people said. Russia contributed over 35% of India’s total crude imports in 2023, amounting to 1.7 million barrels per day, according to S&P Global. 

In December, Indian imports of Russian crude oil averaged 1.43 million barrels per day, reflecting a decrease of 150,000 barrels per day compared with November, and a significant drop of 620,000 barrels per day from the peak in May, which marked India’s highest monthly imports from Russia. 

 For more information visit at https://happenrecently.com/zepto/?amp=1

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